AAR CORP (AIR) Stock Fundamental Analysis
NYSE:AIR - New York Stock Exchange, Inc. - US0003611052 - Common Stock - Currency: USD
Taking everything into account, AIR scores 4 out of 10 in our fundamental rating. AIR was compared to 65 industry peers in the Aerospace & Defense industry. AIR has a medium profitability rating, but doesn't score so well on its financial health evaluation. AIR has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
AIR had positive earnings in the past year.
AIR had a positive operating cash flow in the past year.
AIR had positive earnings in each of the past 5 years.
Of the past 5 years AIR 4 years had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of -0.44%, AIR is doing worse than 61.54% of the companies in the same industry.
With a Return On Equity value of -1.07%, AIR perfoms like the industry average, outperforming 41.54% of the companies in the same industry.
With a decent Return On Invested Capital value of 7.16%, AIR is doing good in the industry, outperforming 64.62% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AIR is in line with the industry average of 8.44%.
The 3 year average ROIC (6.62%) for AIR is below the current ROIC(7.16%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.44% | ||
| ROE | -1.07% | ||
| ROIC | 7.16% |
ROA(3y)3.83%
ROA(5y)2.8%
ROE(3y)6.5%
ROE(5y)4.72%
ROIC(3y)6.62%
ROIC(5y)5.45%
1.3 Margins
In the last couple of years the Profit Margin of AIR has grown nicely.
Looking at the Operating Margin, with a value of 8.05%, AIR is in line with its industry, outperforming 58.46% of the companies in the same industry.
In the last couple of years the Operating Margin of AIR has grown nicely.
The Gross Margin of AIR (18.82%) is worse than 70.77% of its industry peers.
AIR's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.05% | ||
| PM (TTM) | N/A | ||
| GM | 18.82% |
OM growth 3Y13.73%
OM growth 5Y9.68%
PM growth 3Y-2.68%
PM growth 5Y41.67%
GM growth 3Y4.53%
GM growth 5Y3.5%
2. Health
2.1 Basic Checks
AIR has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
AIR has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, AIR has more shares outstanding
The debt/assets ratio for AIR is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.98 indicates that AIR is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.98, AIR perfoms like the industry average, outperforming 49.23% of the companies in the same industry.
A Debt/Equity ratio of 0.86 indicates that AIR is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.86, AIR is doing worse than 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.98 |
ROIC/WACC0.74
WACC9.71%
2.3 Liquidity
AIR has a Current Ratio of 2.82. This indicates that AIR is financially healthy and has no problem in meeting its short term obligations.
AIR has a Current ratio of 2.82. This is comparable to the rest of the industry: AIR outperforms 58.46% of its industry peers.
A Quick Ratio of 1.39 indicates that AIR should not have too much problems paying its short term obligations.
AIR has a Quick ratio (1.39) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.39 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.70% over the past year.
The Earnings Per Share has been growing slightly by 5.34% on average over the past years.
AIR shows a strong growth in Revenue. In the last year, the Revenue has grown by 21.07%.
The Revenue has been growing slightly by 2.48% on average over the past years.
EPS 1Y (TTM)10.7%
EPS 3Y35.99%
EPS 5Y5.34%
EPS Q2Q%16.47%
Revenue 1Y (TTM)21.07%
Revenue growth 3Y11.96%
Revenue growth 5Y2.48%
Sales Q2Q%19.55%
3.2 Future
AIR is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.14% yearly.
Based on estimates for the next years, AIR will show a small growth in Revenue. The Revenue will grow by 3.31% on average per year.
EPS Next Y14.32%
EPS Next 2Y16.8%
EPS Next 3Y16.14%
EPS Next 5YN/A
Revenue Next Year17.19%
Revenue Next 2Y10.98%
Revenue Next 3Y8.98%
Revenue Next 5Y3.31%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 19.74, the valuation of AIR can be described as rather expensive.
AIR's Price/Earnings ratio is rather cheap when compared to the industry. AIR is cheaper than 89.23% of the companies in the same industry.
AIR is valuated rather cheaply when we compare the Price/Earnings ratio to 27.45, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 15.78, which indicates a correct valuation of AIR.
Based on the Price/Forward Earnings ratio, AIR is valued cheaply inside the industry as 90.77% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 21.90. AIR is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.74 | ||
| Fwd PE | 15.78 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AIR is valued cheaper than 93.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.9 |
4.3 Compensation for Growth
AIR's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
AIR's earnings are expected to grow with 16.14% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.38
PEG (5Y)3.7
EPS Next 2Y16.8%
EPS Next 3Y16.14%
5. Dividend
5.1 Amount
No dividends for AIR!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
71.46
+0.38 (+0.53%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners98.27%
Inst Owner Change-0.32%
Ins Owners2.28%
Ins Owner Change-1.24%
Market Cap2.58B
Analysts82
Price Target79.22 (10.86%)
Short Float %2.05%
Short Ratio2.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.76%
Min EPS beat(2)1.68%
Max EPS beat(2)5.83%
EPS beat(4)4
Avg EPS beat(4)3.21%
Min EPS beat(4)1.68%
Max EPS beat(4)5.83%
EPS beat(8)8
Avg EPS beat(8)3.65%
EPS beat(12)12
Avg EPS beat(12)3.95%
EPS beat(16)14
Avg EPS beat(16)3.65%
Revenue beat(2)1
Avg Revenue beat(2)-0.05%
Min Revenue beat(2)-3.93%
Max Revenue beat(2)3.84%
Revenue beat(4)2
Avg Revenue beat(4)0.01%
Min Revenue beat(4)-3.93%
Max Revenue beat(4)3.84%
Revenue beat(8)4
Avg Revenue beat(8)0.7%
Revenue beat(12)7
Avg Revenue beat(12)1.07%
Revenue beat(16)10
Avg Revenue beat(16)1.11%
PT rev (1m)0%
PT rev (3m)-3.52%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.63%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.11%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.83%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.74 | ||
| Fwd PE | 15.78 | ||
| P/S | 0.96 | ||
| P/FCF | N/A | ||
| P/OCF | 280.4 | ||
| P/B | 2.18 | ||
| P/tB | 5.99 | ||
| EV/EBITDA | 12.9 |
EPS(TTM)3.62
EY5.07%
EPS(NY)4.53
Fwd EY6.34%
FCF(TTM)-0.64
FCFYN/A
OCF(TTM)0.25
OCFY0.36%
SpS74.31
BVpS32.76
TBVpS11.93
PEG (NY)1.38
PEG (5Y)3.7
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.44% | ||
| ROE | -1.07% | ||
| ROCE | 9.33% | ||
| ROIC | 7.16% | ||
| ROICexc | 7.43% | ||
| ROICexgc | 11.22% | ||
| OM | 8.05% | ||
| PM (TTM) | N/A | ||
| GM | 18.82% | ||
| FCFM | N/A |
ROA(3y)3.83%
ROA(5y)2.8%
ROE(3y)6.5%
ROE(5y)4.72%
ROIC(3y)6.62%
ROIC(5y)5.45%
ROICexc(3y)6.91%
ROICexc(5y)5.8%
ROICexgc(3y)8.82%
ROICexgc(5y)7.13%
ROCE(3y)8.62%
ROCE(5y)7.1%
ROICexcg growth 3Y14.12%
ROICexcg growth 5Y4.68%
ROICexc growth 3Y2.34%
ROICexc growth 5Y-1.64%
OM growth 3Y13.73%
OM growth 5Y9.68%
PM growth 3Y-2.68%
PM growth 5Y41.67%
GM growth 3Y4.53%
GM growth 5Y3.5%
F-Score2
Asset Turnover0.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.75 | ||
| Cap/Depr | 56.69% | ||
| Cap/Sales | 1.2% | ||
| Interest Coverage | 3.47 | ||
| Cash Conversion | 3.37% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.39 | ||
| Altman-Z | 2.98 |
F-Score2
WACC9.71%
ROIC/WACC0.74
Cap/Depr(3y)76.7%
Cap/Depr(5y)63.04%
Cap/Sales(3y)1.24%
Cap/Sales(5y)1.11%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)10.7%
EPS 3Y35.99%
EPS 5Y5.34%
EPS Q2Q%16.47%
EPS Next Y14.32%
EPS Next 2Y16.8%
EPS Next 3Y16.14%
EPS Next 5YN/A
Revenue 1Y (TTM)21.07%
Revenue growth 3Y11.96%
Revenue growth 5Y2.48%
Sales Q2Q%19.55%
Revenue Next Year17.19%
Revenue Next 2Y10.98%
Revenue Next 3Y8.98%
Revenue Next 5Y3.31%
EBIT growth 1Y46.27%
EBIT growth 3Y27.33%
EBIT growth 5Y12.39%
EBIT Next Year65.14%
EBIT Next 3Y25.93%
EBIT Next 5YN/A
FCF growth 1Y-101.75%
FCF growth 3Y-47.1%
FCF growth 5Y-22.59%
OCF growth 1Y-49.45%
OCF growth 3Y-25.44%
OCF growth 5Y-8.34%